IMPROVE Act to increase gas tax by six cents, prioritize 962 transportation projects

Photo by Andrew Wigdor / News Editor

Gov. Bill Haslam’s IMPROVE Act, which went into effect on July 1, will assist in the prioritization of 962 Tennessee transportation projects over the next 15 years, increase the gasoline tax by six cents over the next three years and create a series of tax cuts.

According to Tennessee Infrastructure Alliance Chairman Bill Moore, Haslam first proposed the increase in gasoline due to inflation. Tennessee has not increased its gas tax since 1989, and the cost of building and maintaining roads in the state has almost doubled during that time, according to Moore.

“There was congestion in a lot of our cities,” Moore said. “In the rural areas, there were bridges that were closed. We were slowly but surely getting into a maintenance mode. They had enough money to pave the roads and keep them smooth but not enough to widen them and reduce congestion in the major cities.”

In Rutherford County alone, there are 14 major transit projects that would benefit from the increased funding that the Tennessee Department of Transportation (TDOT) will receive from the IMPROVE Act.

“If (TDOT) does not have the money to do it, it waits for another year,” Moore said. “They are in a, what we call, pay-as-we-go state. They accumulate the money, they get the money and then they built something.”

Haslam has researched and modified the IMPROVE Act for the last two years, according to Moore.

“He spent bigger parts of the last two years flying across the state, meeting with communities, meeting with members of the general assembly to assess what the needs were, what projects really needed to be included,” Moore said.

Originally, Haslam had set the tax increase in the IMPROVE Act to seven cents for gasoline and 12 cents for diesel, which would allow for the IMPROVE Act to address the road needs in about 10 to 12 years. After negotiating and compromising with the Tennessee General Assembly, the increase was brought down to six cents for gasoline and 10 cents for diesel, making the IMPROVE Act a 15-year plan. As of July 1, gasoline and diesel taxes were increased by four cents, statewide. There will be a one cent increase in the gasoline tax in each of the next two years and a three-cent increase in the diesel tax for 2018 and 2019.  The increases in the diesel and gasoline taxes will provide millions of dollars in additional funding to TDOT, allowing for the prioritization of almost 1,000 projects.

According to Haslam’s IMPROVE Act plan, $35 million of funding gained from the act will be spent in cities, and $70 million will be spent in counties. The funding will provide increased access to towns and neighborhoods and relieve congestion on the roads.

With the increase in gas taxes, the IMPROVE Act also allowed for a one percent decrease in Tennessee’s sales and use tax rate on food and food ingredients, which was effective July 1.

According to Moore, a family of four, on average, will pay about $5.54 per month in additional user fees due to the gas tax but will save an average of $7.73 per month at their local grocery store due to the cut to food taxes, providing an approximate savings of $2.19 per month.

“What I like to say is, ‘You pay less at the store than you do at the pump,’” Moore said.

The IMPROVE Act also includes reductions in business taxes for manufacturers, a complete “phase out” of the Hall income tax by January 2021 and property tax relief for eligible elderly and disabled homeowners and service-disabled veterans.

“This is the biggest tax reduction in the history of the state,” Moore said.

In addition to the lowered taxes, the IMPROVE Act includes an option that enables the twelve most populous counties to hold referendums for tax increases to assist in the funding of local transit needs.

“They can’t create any new taxes, but they can use any existing taxes that they have,” Moore said. “They can raise the sales tax up to the max, for example. If the people voted it in, that would be money that they could use to improve transit.”

Haslam’s plan also states that electric vehicle owners will “pay their fair share.” The IMPROVE Act will implement an eight-cent increase on compressed natural gas and liquefied gas over the next three years.

“The last three years in Tennessee, the vehicle miles traveled, which is the all the miles traveled by everyone in the state, has been up by about nine percent,” Moore said. “That’s projected to increase by another 20 percent in the next 12 years. There were about 1,036 (traffic) fatalities in Tennessee last year, which is way, way too many. This plan will have a lot of safety projects in it to try to improve things.”

To contact News Editor Andrew Wigdor, email

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